Rebuilding and Reimagining Middle Neighborhoods for the Post-Covid World

By: Shounak Bagchi and Eli Reilly

Since March, experts have speculated wildly about the pandemic’s effects on urban life. Many argue that residents of high-demand cities, already financially squeezed from crushing rent and stagnant wages, will abandon these areas in favor of cheaper, less crowded alternatives. Telecommuting and the collapse of the entertainment and nightlife sectors may finally spell the end of superstar cities. Why pay San Francisco rents when you can telecommute from Colorado Springs? Why pay for New York luxuries if you can’t see a Broadway show until 2022?

There is some evidence to support this idea. Rents are down across the board in high-tech hubs like Seattle, New York, and Washington D.C.—in San Francisco, rents have fallen by as much as 31 percent. A recent poll of tech workers in New York and the Bay Area indicated that over 40 percent would relocate to a less expensive city if given the opportunity to permanently work remotely. September 2020 rental data show that demand is increasing in spillover markets like Worcester, Massachusetts and Tacoma, Washington, both convenient locales for fleeing urbanites.

But despite new interest in secondary markets, a mass exodus from urban areas remains doubtful. The young professionals who have largely fueled urban growth are unlikely to abandon their preferences for neighborhood amenities like high quality dining, walkability, diversity, and cultural vibrancy and move to the suburbs.

Thus, this unique moment presents a critical opportunity for all cities. An innovative urban planning strategy known as “middle neighborhoods” can help big cities become more affordable and smaller ones more attractive to new working populations, while also paving the way for a more sustainable urban future.

Middle neighborhoods are already a feature of most cities. Built prior to the 1940s, middle neighborhoods are medium-density urban spaces that include a mix of single-family homes, house-style buildings containing multiple units, ample public space, greenery, and sufficient population density to support a variety of businesses and services. Since World War II, developers largely abandoned medium-density projects in favor of larger apartment buildings or single-family homes.

Transit is also a key feature of middle neighborhood infrastructure. Increased density enables designs that reduce carbon emissions by promoting walking, biking, public transit, and other multi-modal options. With population densities between 8,000 and 11,000 people per square mile, middle neighborhoods are the sweet spot for urban livability.

So how can we achieve this broad-based prosperity and create middle neighborhoods?

The first step is creating desirable density by increasing housing supply—policymakers must dismantle policies used to keep density low. Removing or minimizing single-family zoning regulations, parking requirements, complex permitting processes, and floor-to-area ratios would reduce critical barriers to building new housing.

The scale of change necessary, however, requires action beyond the local level; federal policy change will be critical as well. To start, federal lawmakers must move beyond the Low Income Housing Tax Credit program and expand programs that finance multi-unit construction. Entities like the Federal Housing Administration, Fannie Mae, and Freddie Mac could underwrite the growth in medium-density housing supply, just as they have for tens of millions of single-family homes. Increasing federal funding to the national network of Community Development Financial Institutions would also go a long way to expand financing options.

As we reshape policy and invest in programs to build new middle neighborhoods, we should also invest in existing ones. Between one-third to a half of urban America already lives in middle neighborhoods. These areas served as working- and middle-class family housing in cities like Detroit, Oakland, and Baltimore before social and economic factors moved jobs elsewhere. Worsening economic conditions led to many neighborhoods falling into disrepair, inducing a negative feedback loop that is difficult to stop. New public investments in green space, effective public transit, and renovating the existing housing stock can have transformative effects on these struggling communities.

Whether building new middle neighborhoods or investing in existing ones, capital investment is only a first step. Ensuring access to households of all income levels is also critical to their success. Expanding credit to lower income families—particularly communities of color—through community banking would create homeownership opportunities. New tax programs incentivizing home renovations could also be useful. And pursuing inclusive zoning reforms would help ensure middle neighborhoods are truly mixed-income communities.

But while density and accessibility are critical, they are not the only policy areas necessary to enhance the livability of middle neighborhoods.

Given the changing nature of work, twenty-first century middle neighborhoods must also include space for shared working centers. Expanding the scope of public libraries, existing communal work spaces with ample room and strong internet connections, could easily provide many of the new professional and digital services required by the new remote workforce in an equitable and accessible manner. This would also require municipalities to increase their broadband capabilities, a long overdue civic upgrade.

Galvanizing entrepreneurship should also be a key priority. New investments must create space for local small businesses to flourish. Just as new housing developments reserve units for lower-income households, new retail developments in middle neighborhoods should reserve space for local businesses. New forms of credit and financing should also be made available, particularly for people and small businesses deemed ineligible for traditional bank loans. These businesses can be further supported by redesigning state and federal tax incentives which have, for too long, favored corporate development. Such policies ensure commerce clusters have a strong communal connection while also keeping consumer dollars local, perpetuating growth and opportunity for residents of all income levels.

The Covid-19 crisis has drastically reshaped society, creating space to reimagine our built environment for the better. Middle neighborhoods can create urban spaces that provide better access to housing and opportunity for everyone. We must learn from our past mistakes and ensure new developments aren’t simply  tools to create new inequalities. With the right combination of policies, this strategy can capitalize on the current crisis and chart a new course towards an inclusive, twenty-first century urban America.

Photo of Columbia Heights rowhouses in Washington, D.C. by Mr.TinDC on Flickr


Shounak Bagchi is an sustainable finance consultant and writer and Eli Reilly is a public policy analyst.